Many things will help put a band-aid on your debt situation. However, you will never recover from the endless debt syndrome if you don't increase your awareness about the behaviour that got you in debt in the first place!
Are you acting as if you believe one or more of these "Debt Myths" are true?
Myth # 1 - Higher income will get you out of debt
Nothing could be further from the truth. In fact, statistics show that the more money you make, the higher the amount of your debt.
Myth # 2 - Small debt is no big deal
People who think that small debt doesn't make a difference are usually people who have large debt. The secret to getting out of debt is to stop incurring even small debts.
Myth # 3 - If the interest rate is low, then the debt is OK
Even if the loan has 0% interest, you are still increasing your debt. This sales gimmick often fools people. If you can't afford it, you still can't afford it with the interest rate lowered.
Myth # 4 - The debt doesn't matter because inflation will bail me out
Let's say you buy a house that's much bigger than you need. You know that in a few years, you will make all the money back because the bigger house will be worth more. In the mean time, you struggle just to make your mortgage payments. Remember these words: "First - survive; then, thrive."
Myth # 5 - You are "entitled" to the purchase
Many people will totally disregard the debt or expense because they feel a sense of entitlement. You may have said: " I deserve that item" when you're buying something.
Which of these myths do you believe?
Mushtaq Sayed is a broker with Century 21 Leading Edge Realty in Scarborough, Ontario.